Weaker performance from the coffee, peanuts and edible oils segment hit earnings.
Commodity trader Olam International failed to maintain the positive growth momentum it started in Q1 after the company's profits crashed by 36.4% YoY to $93.91m in Q2 on the back of sluggish sales from coffee, peanuts and edible oils segment, according to its financial statement.
Olam’s profit after tax and minority interests also fell 13.6% to $252m in the first half of the year.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 12.5% amidst broad-based decline in Olam’s product segments with EBITDA for the edible nuts, spices & vegetable ingredients dropping by 7.2% to $236.7m H1 amidst lower peanut farming produces in Argentina.
EBITDA for the confectionary and beverage ingredients also inched down by 4.5% to $178.3m amidst challenging market conditions plaguing the Coffee segment.
Similarly, EBITDA for the food staples and packaged foods also crashed 23.2% to $167.3m after the Edible Oils platform was rocked by volatile trading costs and higher period costs in Olam Palm Gabon.
“Whilst our first half results were lower than the previous corresponding period, we expect stronger prospects for our business for the rest of the year. Our investments in improving operational excellence (stronger cash, cost and capital focus), launch of AtSource, and digitalisation initiatives have progressed well and will strengthen our business going Forward,” Olam co-founder and group CEO Sunny Verghese said in a statement.
Olam declared an interim dividend of 3.5 cents per share.
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